Move house and still get mortgage interest paid?

Honey9036 · 26 February 2005 at 12:55AM

Hello All!

I love this site and scour the forums daily for tidbits! I feel a bit guilty about my lack of posts until now (pure cowardice!

), but I really need advice and I would greatly appreciate any comments please.

My position is that due to ill health (ME, Depression, Anxiety) I have been on IB for the last 6 years. I also get my mortgage interest paid (for which I am eternally grateful).

The problem I have is that I have been unhappy living where I am for several years now. Before my life was turned upside down I had always planned to sell this flat and move somewhere different. But I assumed that because I was now on benefits that I would be unable to move.

The scarey thing for me is that my health does not seem to be improving and I feel no closer to being able to hold down a job (I have tried and failed). I hate to think that I am stuck living here forever (or until my circumstances change).

The mortgage I have on my flat is approximately one third of its current value. Does anyone know whether I would be able to sell my flat and buy somewhere else AND STILL get assistance with paying mortgage interest? I would not plan on increasing the size of my mortgage - it would just be a move to somewhere of equal or lesser value.

My reasons for moving are not purely whimsical. I find it very hard to look after myself properly (eating regularly, shopping, doing housework, etc) - and it would be more helpful to me to live closer to my family, whilst retaining my independence.

I hope this request doesn't sound too selfish or greedy. I realise that in the grand scheme of things my life is not so bad. If I had my way I would be back working and living a *normal* life. But in the meantime I just want to make the best of a very bad situation.

Thanks for reading this.

Lori

Fran · 26 February 2005 at 3:23AM

I would advise you to visit or ring your local Citizens Advice Bureau about this one. It sounds complicated because at some stage you may end up with capital. You need professional advice on this.

Have you considered a claim for DLA?

Have you read this thread - ME, Depression & Glandular Fever link?

bernardh_2 · 26 February 2005 at 9:12AM

I was in a similar position 2 years ago.I decided to sell my flat in London and return oop north - clear all my debts and buy a similar property in Sheffield.
When I asked if I would still get my (small) interest payments paid they said they didn`t know and suggested that I move first and then ask.Useless.
Also,will your mortgage co allow you to do this?.Mine was very unsure.
As Fran says,if you end up with capital from this move,they may stop some of your benefits.One person I spoke to said that paying my debts could be regarded as deliberately getting rid of capital as barclaycard etc were not demanding all their money NOW.
Please take lots of advice before you do anything and I wish you all the best for the future.

Ted_Hutchinson · 26 February 2005 at 9:55AM

Several folk have done this on another forum I post at.
Providing the new mortgage interest payment is the same or less than the current payments being met by the State then they have had no problems at all (Well apart from those caused by solicitors, building societies, estate agents and the other seller)But the DWP side of the proceedings was the least traumatic.

People moving from rental to purchase can also get assistance with Mortgage Interest (no help with repayment of capital) again limited to the current level of assistance, no increases allowed.

Remember the DWP pay only at a Standard Interest Rate and this may be lower than your mortgage provider charges. The changes to the DWP standard rate (as it's an average) may not coincide with the rate your society/bank is charging so it will need watching as will payment dates. Some Building Societies haven't alerted those having DWP help with housing costs when the DWP payments weren't sufficient and the debt was increasing progressively so be warned.

See the Shelter information Help with Mortgage Interest

There can be a waiting period before the payments kick in so you need to say if you are in a vulnerable category. There may also be problems if you break the claim. ie Move from current HB claim to relations(no claim) then into new property. Because of the break in claim a new waiting period was enforced. If the claimant had gone from HB to mortgage payments with no break in claim then the waiting period would have been avoided. Another problem can be when you really need to overlap the payments. (ie complete on new house while continuing to pay rent on existing property to end of lease) The circumstances where they will pay two payments simultaneously are very limited.

Honey9036 · 27 February 2005 at 4:21PM

Thanks to everyone for your replies, particularly Ted! (Could you possibly PM me with the link to the forum you mentioned?)

Based on what's been said here I will now start to make tentative enquiries without worrying that people will say to me "You want to do WHAT!!!???? Don't be so stupid!! Go away..."

I'll be sure to report back any progress I make.

Lori
x

Poppy9 · 27 February 2005 at 9:43PM

Just out of interest if you have an interest only mortgage the DWP are effectly helping you to buy your home. What happens if you die or sell up. Do the DWP have a claim on your property for the time they were covering the repayments. i.e. say you owned a property for 25 years and the DWP paid your interest for 10 years do they own 10/25th of your property?

Ted_Hutchinson · 27 February 2005 at 9:55PM

Poppy9 wrote:

Just out of interest if you have an interest only mortgage the DWP are effectly helping you to buy your home. What happens if you die or sell up. Do the DWP have a claim on your property for the time they were covering the repayments. i.e. say you owned a property for 25 years and the DWP paid your interest for 10 years do they own 10/25th of your property?

If you have an interest only mortgage you still have to repay the capital at the end of the term. So if you sell up or die you or your estate have to pay off the remaining capital which you haven't been repaying during the mortage term.

It's possible if house prices have increased and you don't need to buy another property but it's not going to be much fun if house prices drop. People with endowment policies which aren't going to meet the mortgage amount are in a similar position now and many are panicking about how they are going to make up the shortfall. If at the end of the term you don't repay the mortgage then the Mortgage provider will repossess the property.

But the DWP don't take a charge on the property. In the same way they don't get commission from the landlord if they pay your rent.

Ted_Hutchinson · 27 February 2005 at 9:59PM

Zziggi wrote:

We managed to do this. The mortgage on the new place was slightly larger but the DSS still pays that. ....<snip>....... We did this (and it was due to ME as it happens and it was to get caring support from family) and we got our interest on the new place paid striaght away. ........

It's not usual for them to allow you to have higher mortgage payments, probably because of your disability needs or the total level of payments wasn't unreasonable.

Move house and still get mortgage interest paid?

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